Probate Threshold now $40,000 – But Dying Without a Will Can Still Devastate Those Left Behind
A long-awaited change to New Zealand’s estate law took effect on 24 September 2025: the probate threshold has risen from $15,000 to $40,000, making it easier for families to deal with smaller estates without going to court: legislation.govt.nz. This new threshold applies to some non-land assets (such as money in bank accounts and KiwiSaver funds) and reflects modern realities – especially the rise of KiwiSaver balances, which now commonly exceed the old $15,000 limit. Probate is still required:
For any land or house owned solely by the deceased;
For shares or government bonds worth over $15,000;
For non-financial assets like vehicles, jewellery, or artworks, because legal ownership must be transferred or the item sold, and probate is required to protect the executor or trustee from legal risk
While this change is good news for many families, it does not solve every problem. Crucially, it does nothing to protect those left behind when someone dies without a will. Even with the higher threshold, dying intestate (without a valid will) can still create heartbreak and legal headaches for your loved ones.
What’s Changing Under the New $40,000 Threshold
No Court Grant Needed for Small Estates: If a person dies leaving some non-land assets valued at $40,000 or less, a High Court grant of probate or letters of administration may not be required. Banks, insurance companies, employers, KiwiSaver providers, and certain government agencies can release funds of up to $40,000 directly to a deceased person’s family or other eligible persons without requiring probate or letters of administration. This speeds up access to funds, reduces legal costs, and spares families unnecessary stress.
Authority from Legislation: The change comes from the Administration (Prescribed Amounts) Amendment Regulations 2025, which amended the regulations under the Administration Act 1969 to increase the “prescribed amount” to $40,000 for most assets: legislation.govt.nz. In particular, Section 65 of the Administration Act 1969 – “Payment without administration” – allows certain institutions (banks, ACC, employers, superannuation funds, etc.) to pay out money owed to the deceased (like account balances, wages, life insurance proceeds) up to $40,000 without probate: legislation.govt.nz. They can pay this directly to a surviving spouse, de facto partner, child, or other close relative entitled to administer or benefit from the estate.
Related Small Estate Provisions: Other provisions of the Administration Act also permit the handling of small assets without a court grant. For example, Section 64 covers transfer of government or local authority bonds (loan stock), and Section 64A covers shares and debentures, in the name of a deceased, without probate. These sections also use the “prescribed amount” as a cap. Important: The recent law change did not raise the cap for shares or bonds – those remain at $15,000 for now. In other words, a company can only re-register shares (or a council/government registrar can transfer bonds) worth up to $15,000 without a grant of administration. Anything above $15,000 in shares or bonds will still require formal probate or administration.
Effective immediately: The new $40k threshold applies regardless of when a person died (before or after 24 September 2025), as long as no grant of administration has been issued yet: legislation.govt.nz. Families of someone who died with a modest estate could even choose to delay applying for probate until after 24 September 2025 to take advantage of the higher limit.
When Is Probate Still Required (Even for Small Estates)?
It’s important to know the exceptions – situations where, despite the total value being under $40,000, you still need to go through the court:
Real Estate (Land): If the deceased owned any real property (land or a house) in their sole name, a grant of probate or letters of administration must be obtained to deal with that property regardless of its value. There is no value threshold for land. This means even if a house is of low value (or the estate is otherwise small), you cannot sell or transfer the property to heirs without the formal High Court grant. The Land Transfer system requires an executor or administrator to be registered to transmit the title, which necessitates a probate or administration grant.
Shares and Bonds Over $15,000: As noted, the $40,000 threshold does not apply to certain investments. If the deceased had more than $15,000 in company shares or debentures, or more than $15,000 in government or local government bonds, those assets cannot be transferred under sections 64 or 64A without a court grant. For example, if someone dies with $10,000 in the bank and $20,000 in shares, the total is $30k (under $40k) – but because the shares exceed $15k, the share registry will insist on probate or administration for the transfer. In practice, any single asset outside the $40k rule can trigger the need for a grant.
Jointly Held Assets: Note that jointly owned assets (like a joint bank account or a home owned jointly with a partner) usually pass to the survivor directly by survivorship, and do not require probate for that transfer. But assets in the deceased’s sole name are subject to the above rules.
Non-Financial Assets: The $40,000 probate threshold primarily concerns financial assets held by institutions. Probate is still required:
For any land or house owned solely by the deceased;
For shares or government bonds worth over $15,000;
For non-financial assets, such as vehicles, jewellery, or artworks. To transfer legal ownership or sell non-financial assets, probate or letters of administration are required to protect the executor or trustee from legal risk. If such items are the only assets and they are of modest value, families often distribute them informally. However, caution is advised in case of disagreements.
Bottom line: If an estate includes anything significant outside the narrow scope of the $40,000 no-probate rule, you will likely need to apply for probate or letters of administration. The new law makes some small estates simpler, but it’s not a free pass in every case.
The Hidden Trap: Dying Without a Will
These updated rules will help families handle small estates more easily – but only in cases where the deceased’s affairs are straightforward and uncontested. Crucially, they do not replace the need for a valid will. The streamlined procedures only apply if no one has started a court process for the estate, and they assume there’s no dispute over who should receive the money.
If you die without a will (intestate), New Zealand law dictates who inherits your property, via a rigid formula in Section 77 of the Administration Act 1969. This formula (the intestacy scheme) may completely ignore your personal wishes and even bypass the people closest to you. In fact, the law might benefit relatives you’ve lost contact with – at the expense of a partner or others you truly wanted to provide for.
To illustrate, let’s look at a real-life example that shows how devastating dying intestate can be:
💔 Real-Life Example: Daisy and Peter
Daisy had been in a committed de facto relationship with Peter for 15 years. Peter had two adult children from a previous relationship, whom he hadn’t seen in over 20 years. Peter told Daisy many times that he wanted her to inherit everything – the home they shared and all his savings – but he never made a will.
When Peter suddenly passed away, his estate consisted of:
Their family home (in Peter’s sole name) – worth $1 million
KiwiSaver and savings – totalling $400,000 (held in accounts solely in Peter’s name)
Because Peter died without a will, his estate had to be distributed according to the intestacy formula in section 77 of the Administration Act. Under that law, when someone dies leaving a partner and children, the division is as follows:
Daisy, as the surviving de facto partner, was legally entitled to all of Peter’s personal chattels (household furniture, car, personal effects) plus the first portion of the estate up to a prescribed sum (set by regulation). That sum is currently $155,000 (this amount has not changed with the introduction of the new $40,000 probate threshold).
After that, the first $155,000 is allocated to Daisy, and one-third of the remaining estate goes to Daisy.
The remaining two-thirds must be divided among Peter’s children.
In Peter’s case, roughly this meant: Daisy received $155,000 plus one-third of the balance, and Peter’s estranged children – despite having no contact with him for decades – received the other two-thirds of the balance. When the math was done, Daisy ended up with far less than half of the estate, despite having shared a life with Peter for 15 years and his desire for her to have it all. The family home they lived in would likely have to be sold, because Daisy could not afford to pay out the children’s share of its value.
How Daisy Felt: She was devastated. Not only was she grieving the loss of her partner, but she also discovered that the law completely ignored Peter’s promises and their life together. The bulk of Peter’s assets were legally going to children who had virtually no relationship with him (and certainly no relationship with Daisy).
To try to correct this injustice, Daisy had to engage lawyers and embark on multiple court claims after Peter’s death, including:
A claim under the Property (Relationships) Act 1976 – to have the court recognise her share of the relationship property. (As a long-term de facto partner, Daisy was entitled to claim half of the assets that were earned or acquired during the relationship. This could include part of the house value and savings. However, asserting those rights still required legal action because Peter hadn’t formalised it with a will or agreement.)
An application under the Family Protection Act 1955 – arguing that Peter’s estate did not make “adequate provision” for her as his de facto spouse. Under that Act, close family (including spouses/partners and children) can seek a larger share of an estate if the deceased failed to properly provide for their support and maintenance. Daisy had to ask the High Court to effectively override the default intestacy split, due to her financial needs and her contributions to Peter’s life.
A claim under the Law Reform (Testamentary Promises) Act 1949 – because Peter had promised to leave everything to Daisy. This law allows someone to enforce a promise made by the deceased (for example, “I’ll take care of you” or “you’ll inherit the house if you stay by my side”), if the person claiming can show they provided services or support to the deceased in return for that promise. Daisy had years of commitment to point to, but without a will, she now had to prove it in court.
All of these claims are costly, time-consuming, and stressful. Daisy had to hire lawyers, gather evidence of her life with Peter, and enter a legal battle – all while mourning her partner. It could take months or even years to resolve, and there was no guarantee the outcome would fully reflect Peter’s wishes. The estranged children were, understandably, not eager to give up their two-thirds share, so Daisy faced an uphill fight.
This sad story is a real lesson: the law can be harsh when there’s no will. Even someone you never intended to benefit can end up with a large portion of your estate, and the loved one you wanted to protect may have to fight in court for what they should have had outright.
Why Having a Will Is Absolutely Essential
A will is not just a formality – it’s your voice after death. It’s the document that speaks your wishes when you are no longer here to speak for yourself. Having a valid will ensures that you decide what happens to your belongings and who takes care of things, rather than leaving it up to inflexible laws or the courts. It protects the people you care about from uncertainty and hardship. Here’s why it’s so important:
✅ You control who inherits: With a will, you get to choose who will receive your assets (money, property, belongings) and in what proportions. You can provide for the people (or charities) that matter to you. Without a will, you have no say – the law will give your estate to family members according to a preset hierarchy, which might not reflect your actual relationships or wishes. (As we saw with Peter’s case, even a long-term partner can be put in a difficult position if the law’s formula isn’t what you wanted.)
✅ You choose your executor: In your will, you appoint an executor – the person who will carry out your instructions and administer your estate. This should be someone you trust to handle your affairs. If you don’t have a will, no executor is named, and the court will appoint an administrator (often a family member) in a process that can be time-consuming. Choosing an executor through a will can also prevent disputes over who should be in charge.
✅ You reduce legal costs and delays: A clear will can simplify the administration of your estate. Although your family might still need to obtain probate for larger estates, it’s generally a straightforward process when a valid will is in place. Without a will, the process (applying for letters of administration) is more complicated – it may require additional steps like identifying and getting consent from family members entitled to apply. Intestacy can also lead to court battles among relatives. All of that means more legal fees, paperwork, and delays before your assets get to the right people.
✅ You spare your loved ones additional stress: Grieving family members are often overwhelmed when someone passes away. Having a will spares them from having to guess what you might have wanted and prevents many fights. They won’t have to worry about whether they need to go to court, advertise for unknown relatives, or any of the other hurdles that come with intestacy. Essentially, a will is a final act of consideration for your loved ones – it makes the path easier during a very tough time.
On the other hand, if you don’t have a will:
❌ You have no say over who inherits your estate: The law will apply a one-size-fits-all formula (the intestacy rules in section 77) to divide your assets. The result might be very different from what you wanted. For example, unmarried or unregistered partners could be left with less than you would have given them, or relatives you hardly know could inherit purely because of their family status.
❌ The law decides who gets what – not you: Intestacy law prioritises certain family connections. For instance, if you have a spouse and children, it guarantees portions to each; if you have no immediate family, it passes everything to increasingly distant relatives. The law does not account for close friends, step-children, or charities – so those people or causes you care about could get nothing if you don’t spell it out in a will.
❌ Those whom you don’t want to benefit may inherit: As seen with Peter’s estranged children, dying without a will can result in people inheriting by default, even if your relationship with them was broken or non-existent. You might have people in your life you don’t want to leave assets to (for personal reasons), but without a will, you can’t prevent it – the default law will give them a share if they fall into the eligible categories.
❌ Expensive court claims might be the only remedy: If your loved ones feel the intestacy split is unfair, their only recourse is to go to court (just as Daisy had to). They might file Family Protection or other claims to seek a larger share, but that is a costly and draining process with no guarantee of success. In short, no will often mean litigation – and that can tear families apart. It’s much better to prevent the problem by clearly stating your wishes in a will.
Final Thoughts
Raising the probate threshold to $40,000 is a welcome and sensible update for handling small estates. It will undoubtedly save many families time, money, and hassle in cases where a loved one dies with only modest assets. However, this reform is no substitute for proper estate planning. High Court fees and paperwork might be avoided for small estates, but the real heartache comes when there is confusion or conflict over who should inherit – something only a well-crafted will can resolve.
The most caring and loving thing you can do for your family is to make a will while you still can. It’s a simple step that provides peace of mind for you and immense protection for those you leave behind. Don’t rely on chance or the default law.
At Ross Holmes Virtual Lawyers, we specialise in making the process easy and personalised. We can:
✅ Prepare clear, legally valid wills that capture your wishes and cover all contingencies.
✅ Assist with estate planning, ensuring your assets are structured to go where you want, and that potential issues (like blended families or trusts) are addressed now, not left to cause trouble later.
✅ Help with estate administration when the time comes – guiding your executors or family through probate (if needed) and the tasks of distributing your estate, with care and efficiency.
📞 Contact us today – before it’s too late – on +64 4 150099 ext. 0. You can also reach out through our website: www.rossholmeslawyers.com. We are here to provide peace of mind for you and your loved ones, now and in the future.
(This article is also available as a downloadable PDF and in our email newsletter – feel free to share it with anyone who might benefit from a better understanding of the new probate rules and the importance of having a will.)
Sources:
Administration Act 1969 – New Zealand Legislation website (sections 64, 64A, 65, 77): legislation.govt.nz.
Administration (Prescribed Amounts) Amendment Regulations 2025 – New Zealand Legislation (SR 2025/158): legislation.govt.nz
